Missouri governor Eric Greitens delivers an outline of the his state budget for fiscal year 2018 during an address at Nixa's Early Childhood Center in Nixa, Mo. on Feb. 2, 2017.(Photo: Guillermo Hernandez Martinez/News-Leader)Buy Photo

Gov. Eric Greitens and top budget leaders in the Missouri House and Senate on Tuesday announced they expect Missouri's general revenue collections to grow by 2.5 percent for fiscal 2019.

But the state is slashing in half the consensus revenue estimate (CRE) for the current year, dropping the current revenue-growth projection for fiscal 2018 to 1.9 percent.

The CRE was revised keeping in mind the recent federal tax reform and state tax cuts that take effect this year, said Dan Haug, Missouri's budget director

Both revenue-growth estimates are below the current year's original 3.8 percent CRE, which the state Office of Administration describes as "a figure established by state budget experts and outside consultants and is one of the basic assumptions the Governor and legislative leaders use to build and balance Missouri’s budget."

The CRE for fiscal 2017 was 3 percent, though actual revenue growth that year totaled 2.6 percent, according to state budget documents. In fiscal 2016, the CRE was set at 2.8 percent, but net general revenue collections increased by only 0.9 percent, according to state budget documents.

The 2.5 percent CRE for fiscal 2019 projects that for the year running from July to June 2019, Missouri will collect $9.418 billion. That would be a $229.3 million increase from the current year's revised estimate of $9.189 billion, according to the Office of Administration.

“I feel the CRE is realistic and I think things are turning in Missouri,” said Sen. Dan Brown, the Rolla Republican who chairs the Senate Appropriations Committee. “However, there is always a bit of a lag in revenue growth. Missouri is open for business and growth will be on the horizon.”

Reduced collections led Greitens to cut about $251 million from the current budget last summer. The revised numbers from the Office of Administration put the expected revenue in fiscal 2018 about $209 million below the revenue estimate in Greitens' first proposed budget.

Parker Briden, a spokesman for Grietens, said there might be withholds following the new CRE, as has been the case previously. If there are withholds, Briden said, they would be "not any crazy-large number" due to the restrictions Greitens previously made.

The summer restrictions "put us in good shape," said Haug, the budget director, once state officials "saw where the revenue estimate was going."

"We're still finalizing the budget, so could there be some small restrictions going forward? Yeah, possibly," Haug said. "But nothing along the magnitude" of Greitens' previous restrictions.

Missouri collected $4.44 billion in general revenue over the past six months — good for a 4.13 percent year-to-date increase, according to the Office of Administration.

But in a span of two weeks, President Donald Trump signed the GOP tax reform bill, and the Missouri Department of Revenue announced that individual income tax cuts would take effect this year as expected.

Even though Missouri was beating its growth rate target for the first half of the current fiscal year, "the second half of the year will be slower," Haug said.

About half of the $209-million decrease reflected in the CRE downgrade can be attributed to GOP tax reform: state-level cuts Missouri lawmakers passed in 2014 and the recent changes made by Congress.

The state tax cuts are expected to reduce revenue about $80 million in the current fiscal year, with the federal overhaul meaning $29 million less in state coffers, Haug said.

Greitens is expected to deliver a budget and a tax reform bill in the next few weeks.